Doha Bank in partnership with the Qatar Exchange (QE) have hosted the first seminar of its kind to highlight opportunities for SMEs seeking to be part of the QE Venture Market, which joins the QE Main Market and is a revolutionary new opportunity for small and medium business to pursue their bold entrepreneurial visions and also benefit from the access to capital that being listed entails.
Companies on the QE Venture Market will trade on the same Universal Trading Platform (UTP) infrastructure used by the QE Main Market, and also benefit from the same regulatory safeguards as that afforded to Main Market companies. The Venture Market will clearly be identifiable as a separate and dedicated marketplace tailored to the needs of small and medium companies.
Dr. R. Seetharaman, Doha Bank Group CEO said: "The Qatar Exchange Venture Market is a showcase of home-grown entrepreneurship and is specifically tailored to meet the needs of small and medium businesses seeking to grow their business organically and require a regulated framework within which they can ply their trade and benefit from access to the financial support and advisory services that are more easily available to listed companies, in addition to a strict set of guidelines and corporate codes as prescribed by the Qatar Financial Markets Authority for listed companies. This not only amplifies the local, regional and international credence of these companies but also sets them on a benchmarked platform that allows for future organic growth and development.
The Qatar Exchange Venture Market is envisioned as the 'Home of Entrepreneurial Qatari companies'. This is a very ambitious goal and the venture market is still in its developmental phase but through proper SME engagement and partnerships with key strategic consultants and partners such as Doha Bank, the Venture Market is seeking to earn top of mind awareness and increasing interest from potential companies looking to list on the market.
Dr. R. Seetharaman said: "Doha Bank is committed to working alongside SMEs and developing structured and personalised solutions for specific SME needs. The Bank offers solutions that go beyond the actual transaction which includes top-down financial advisory services covering strategic projects, insurance and risk management.
The Bank has in the past years built a strong portfolio of services and solutions offered to SMEs both directly through its TATWEER programme and through landmark partnerships such as the Qatar Development Bank's (QDB) Al Dhameen programme.
For small companies the rationale for listing is often, but not always, allied to the need for capital. These include diversifying sources of funding through increasing company's equity base; offering liquidity to financial, family or minority shareholders; visibility, status and valuation; and meeting strategic corporate objectives.
The QE Venture market can also be a dedicated route to market for small and mid-cap companies with advantages of a customised regulatory framework.
Mr Abdulaziz Al Emadi - Listing Director at Qatar Exchange said during his speech, "The diminishing availability of growth capital is now hitting the SME sector at the same time as the international community is becoming more aware of the need for maintaining and stimulating national growth. In the end one solution will most likely be that national economies must stimulate growth in the SME sector by making capital more available."
Mr. Al-Emadi clarified that the criteria set specifically for small and medium enterprises, are different from the currently applicable requirements for listing companies in the main market. The establishment of a junior market will give SME owners the opportunity to be listed in Qatar Exchange under lighter and more flexible regulations, in addition to giving them access to further finance sources to grow and expand their businesses. At the same time offering investors more options through increasing the number of companies to invest their shares in. Proportionate governance is consistent with feedback from those investing in junior public companies. Such investors generally indicate a principal focus on identifying quality management and good growth stories. In the result, proportionate governance has been a key ingredient in the success of the public SME marketplace in for example the UK, Canada and Brazil and is being applied in Europe too.
He also mentioned the main reasons following reasons are worthy of consideration such as (Offering liquidity and valuation, Organizational efficiencies, Diversification of funding options, and Optimizing financial status.
Qatar Exchange's existing Main Market has been the flagship market for leading Qatari companies since its founding in 1997. The market was designed to cater for companies with established track records with experienced management teams and who wished to take advantage of the benefits of being a public company but also had the resources and expertise to cater to the disclosure demands and disciplines of being listed.
The Venture Market has a complementary vision but one with needs of SMEs at its core. QE Venture Market will be dedicated to SMEs who will by definition have a minimal track record and a higher risk profile but companies nonetheless who are growing and need the access to capital that being listed entails.
Being listed on the QE Venture Market will suit smaller entrepreneurial companies with a limited track record and also less resources to meet the heightened investor relations and corporate governance practices demanded of Main Market companies.
Companies on the QE Venture Market will trade on the same UTP infrastructure and benefit from the same regulatory safeguards as that afforded to Main Market companies but will be readily identifiable as a separate and dedicated marketplace.
Over time QE Venture Market companies are expected to graduate to the Main Market as they grow and develop. As with the Main Market, QE Venture Market will be founded on strong domestic roots where issuers and investors come together at the heart of the financial community but one where importantly companies from around the GCC and MENA region will be able to attract the capital to take advantage of the many opportunities available to SMEs in the region.
The process of going public
Early dialogue is recommended with Qatar Exchange and Qatar Financial Markets Authority who is the listing authority for QE Venture Market. The first step is an initial review of the requirements for becoming a listed company. An applicant must:
Be a joint-stock company licensed by the Ministry of Business & Trade (foreign issuers exempt)
Minimum free float of 10%
Minimum subscribed capital of QR5 million
Have an audited one year track record
Publish Information Memorandum approved by QFMA
Undertake to adhere to all QE rules and regulations
Submit documents as specified by QE:
copy of Articles and Memorandum of Association
copy of valid Commercial Registration
QE Venture Market:
Qatari peer group - many of the leading companies in Qatar listed on the exchange;
Product choice - a venue were issuers and investors will be able to choose to diversify their funding sources and investment portfolios through listed equity and in the future bonds or sukuk, ETFs and investment vehicles;
Liquidity - a liquid market for both primary and secondary market product and part of the most liquid exchange group in the world;
Leading technology platform - proven technology platform providing the global standard in the exchange industry
Global visibility - a public company on the most powerful visibility platform of any global exchange.